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A housing cooperative, or housing co-op, is a legal entity, usually a
cooperative A cooperative (also known as co-operative, co-op, or coop) is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically-control ...
or a
corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and r ...
, which owns
real estate Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more general ...
, consisting of one or more residential buildings; it is one type of
housing tenure Housing tenure is a financial arrangement and ownership structure under which someone has the right to live in a house or apartment. The most frequent forms are tenancy, in which rent is paid by the occupant to a landlord, and owner-occupancy, wh ...
. Housing cooperatives are a distinctive form of home ownership that have many characteristics that differ from other residential arrangements such as
single family home A stand-alone house (also called a single-detached dwelling, detached residence or detached house) is a free-standing residential building. It is sometimes referred to as a single-family home, as opposed to a multi-family residential dwellin ...
ownership,
condominium A condominium (or condo for short) is an ownership structure whereby a building is divided into several units that are each separately owned, surrounded by common areas that are jointly owned. The term can be applied to the building or complex ...
s and
renting Renting, also known as hiring or letting, is an agreement where a payment is made for the temporary use of a good, service or property owned by another. A gross lease is when the tenant pays a flat rental amount and the landlord pays for al ...
. The corporation is membership based, with membership granted by way of a share purchase in the cooperative. Each
shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal own ...
in the legal entity is granted the right to occupy one housing unit. A primary advantage of the housing cooperative is the pooling of the members' resources so that their buying power is leveraged; thus lowering the cost per member in all the services and products associated with home ownership. Another key element in some forms of housing cooperatives is that the members, through their elected representatives, screen and select who may live in the cooperative, unlike any other form of home ownership. Housing cooperatives fall into two general tenure categories: non-ownership (referred to as non-equity or continuing) and ownership (referred to as equity or strata). In non-equity cooperatives, occupancy rights are sometimes granted subject to an occupancy agreement, which is similar to a
lease A lease is a contractual arrangement calling for the user (referred to as the ''lessee'') to pay the owner (referred to as the ''lessor'') for the use of an asset. Property, buildings and vehicles are common assets that are leased. Industrial ...
. In
equity Equity may refer to: Finance, accounting and ownership * Equity (finance), ownership of assets that have liabilities attached to them ** Stock, equity based on original contributions of cash or other value to a business ** Home equity, the dif ...
cooperatives, occupancy rights are sometimes granted by way of the purchase agreements and legal instruments registered on the title. The corporation's articles of incorporation and bylaws as well as occupancy agreement specifies the cooperative's rules. The word ''cooperative'' is also used to describe a non-share capital co-op model in which fee-paying members obtain the right to occupy a bedroom and share the communal resources of a house owned by a cooperative organization. Such is the case with student cooperatives in some college and university communities across the United States.


Legal status

As a legal entity, a co-op can contract with other companies or hire individuals to provide it with services, such as a maintenance contractor or a building manager. It can also hire employees, such as a manager or a caretaker, to deal with specific things that volunteers may prefer not to do or may not be good at doing, such as electrical maintenance. In non-equity cooperatives and in limited equity cooperatives, a shareholder in a co-op does not own real estate, but a share of the legal entity that does own real estate. Co-operative ownership is quite distinct from
condominium A condominium (or condo for short) is an ownership structure whereby a building is divided into several units that are each separately owned, surrounded by common areas that are jointly owned. The term can be applied to the building or complex ...
s where people own individual units and have little say in who moves into the other units. Because of this, most jurisdictions have developed separate legislation, similar to laws that regulate companies, to regulate how co-ops are operated and the rights and obligations of shareholders.


Ownership

Each resident or resident household has membership in the co-operative
association Association may refer to: *Club (organization), an association of two or more people united by a common interest or goal *Trade association, an organization founded and funded by businesses that operate in a specific industry *Voluntary associatio ...
. In non-equity cooperatives, members have occupancy rights to a specific suite within the housing co-operative as outlined in their "occupancy agreement", or "proprietary lease", which is essentially a lease. In ownership cooperatives, occupancy rights are transferred to the purchaser by way of the title transfer. Since the housing cooperative holds title to all the property and housing structures, it bears the cost of maintaining, repairing and replacing them. This relieves the member from the cost and burden of such work. In that sense, the housing cooperative is like the landlord in a rental setting. However, another hallmark of cooperative living is that it is
nonprofit A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
, so that the work is done at cost, with no profit motive involved. In some cases, the co-op follows
Rochdale Principles The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale, England and have formed the basis for the principles on which co-operativ ...
where each
shareholder A shareholder (in the United States often referred to as stockholder) of a corporation is an individual or legal entity (such as another corporation, a body politic, a trust or partnership) that is registered by the corporation as the legal own ...
has only one vote. Most cooperatives are incorporated as limited stock companies where the number of votes an owner has is tied to the number of shares owned by the person. Whichever form of voting is employed it is necessary to conduct an election among shareholders to determine who will represent them on the board of directors (if one exists), the governing body of the co-operative. The
board of directors A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit organiz ...
is generally responsible for the business decisions including the financial requirements and sustainability of the co-operative. Although politics vary from co-op to co-op and depend largely on the wishes of its members, it is a general rule that a majority vote of the board is necessary to make business decisions.


Management

In larger co-ops, members of a co-op typically elect a
board of directors A board of directors (commonly referred simply as the board) is an executive committee that jointly supervises the activities of an organization, which can be either a for-profit or a nonprofit organization such as a business, nonprofit organiz ...
from amongst the shareholders at a general meeting, usually the annual general meeting. In smaller co-ops, all members sit on the board. A housing cooperative's board of directors is elected by the membership, providing a voice and representation in the governance of the property. Rules are determined by the board, providing a flexible means of addressing the issues that arise in a community to assure the members' peaceful possession of their homes.


Finance

A housing cooperative is normally ''
de facto ''De facto'' ( ; , "in fact") describes practices that exist in reality, whether or not they are officially recognized by laws or other formal norms. It is commonly used to refer to what happens in practice, in contrast with ''de jure'' ("by la ...
''
non-profit A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
, since usually most of its income comes from the rents paid by its residents (if in a formal corporation, then shareholders), who are invariably its members. There is no point in creating a deliberate surplus—except for operational requirements such as setting aside funds for replacement of assets—since that simply means that the rents paid by members are set higher than the expenses. (It is possible for a housing co-op to own other revenue-generating assets, such as a subsidiary business which could produce surplus income to offset the cost of the housing, but in those cases the housing rents are usually reduced to compensate for the additional revenue.) In the lifecycle of buildings, the replacement of assets (capital repairs) requires significant funds which can be obtained through a variety of ways: assessments on current owners; sales of Treasury Stock (former rental units) to new shareholders; draw downs of reserves; unsecured loans; operating surpluses; fees on the sales of units between shareholders and new and increases to existing mortgages. There are housing co-ops of the rich and famous:
John Lennon John Winston Ono Lennon (born John Winston Lennon; 9 October 19408 December 1980) was an English singer, songwriter, musician and peace activist who achieved worldwide fame as founder, co-songwriter, co-lead vocalist and rhythm guitarist of ...
, for instance, lived in
The Dakota The Dakota, also known as the Dakota Apartments, is a Housing cooperative, cooperative apartment building at 1 West 72nd Street (Manhattan), 72nd Street on the Upper West Side of Manhattan in New York City, United States. The Dakota was construc ...
, a housing co-operative, and most apartments in
New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
that are owned rather than rented are held through a co-operative rather than via a
condominium A condominium (or condo for short) is an ownership structure whereby a building is divided into several units that are each separately owned, surrounded by common areas that are jointly owned. The term can be applied to the building or complex ...
arrangement.


Market-rate and limited-equity co-ops

There are two main types of housing co-operative share pricing: market rate and limited equity. With market rate, the share price is allowed to rise on the open market and shareholders may sell at whatever price the market will bear when they want to move out. In many ways market rate is thus similar financially to owning a condominium, with the difference being that often the co-op may carry a mortgage, resulting in a much higher monthly fee paid to the co-op than would be so in a condominium. The purchase price of a comparable unit in the co-op is typically much lower, however. With limited equity, the co-op has rules regarding pricing of shares when sold. The idea behind limited equity is to maintain
affordable housing Affordable housing is housing which is deemed affordable to those with a household income at or below the median as rated by the national government or a local government by a recognized housing affordability index. Most of the literature on affo ...
. A sub-set of the limited equity model is the no-equity model, which looks very much like renting, with a very low purchase price (comparable to a rental security deposit) and a monthly fee in lieu of rent. When selling, all that is re-couped is that very low purchase price.


Research on housing cooperatives

Research found that housing cooperatives had residents rate themselves as having the highest quality of life and housing satisfaction of any housing organization in the city. Other research among older residents from the rural United States found that those living in housing cooperatives felt much safer, independent, satisfied with life, had more friends, had more privacy, were healthier and had things repaired faster. Australian researchers found that cooperative housing built stronger social networks and support, as well as better relationships with neighbours compared to other forms of housing. They cost 14% less for residents and had lower rates of debt and vacancy. Other research has found that housing cooperatives tended to have higher rates of building quality, building safety, feelings of security among residents, lower crime rates, stable access to housing and significantly lower costs compared to conventional housing.


By country


Canada

Co-ops in Canada offer an affordable alternative to renting, but waiting lists for the units can be years-long.


France

In 2013, the opening of ''La Maison des Babayagas'', an innovative housing co-op in Paris, gained worldwide attention. It was formed as a self-help community and built with financial assistance from the municipal government, specifically for female senior citizens. Located in the Paris suburb of Montreuil after many years of planning, it looks like any other apartment building. The senior citizens stay out of nursing homes, by staying active, alert, and assisting one another. The purpose of the Baba Yaga Association is to create and develop an innovative lay residence for aging women that is: (1) self-managed, without hierarchy and without supervision; (2) united collective, with regard to finances as well as daily life; (3) citizen civic-minded, through openness to the community /city and through mutual interaction, engaging in its political, cultural and social life in a spirit of participatory democracy; (4) ecological in all aspects of life, in conformity with the values and actions expressed in the Charter of Living of the House of Babayagas. Generally, the association's activities are tied to the purpose above, in particular, the development of a popular entity called the University of Knowledge of the Elderly (UNISAVIE: Université du savoir des vieux), and the initiation of a movement to promote other living places that are organized into similar networks. The community charter sets out expectations for privacy. Each apartment is self-contained. Monthly meetings assure the optimal routines of the building and ensure that each person may participate fully and with complete liberty of expression. Plans set out the routine intervention of a mediator who could help get to the bottom of the causes of eventual conflicts in order to allow for their resolution. The success of the Paris co-op inspired several Canadian grassroots groups to adopt similar values in senior housing initiatives; these values include autonomy and self-management, solidarity and mutual aid, civic engagement, and ecological responsibility.


Germany

In the
Industrialisation Industrialisation ( alternatively spelled industrialization) is the period of social and economic change that transforms a human group from an agrarian society into an industrial society. This involves an extensive re-organisation of an econo ...
in the 19th century there were many housing cooperatives founded in Germany. Presently, there are over 2,000 housing cooperatives with over two million apartments and over three million members in Germany. The public housing cooperatives are organised in the
GdW Bundesverband deutscher Wohnungs- und Immobilienunternehmen The GdW Bundesverband deutscher Wohnungs- und Immobilienunternehmen e.V. (Federal Association of German Housing and Real Estate Enterprise Registered Associations) is a syndicate of housing co-operatives in Germany. Its members are smaller federati ...
(The Federal association of German housing and real estate enterprise registered associations).


Egypt

The Housing cooperative project in
Egypt Egypt ( ar, مصر , ), officially the Arab Republic of Egypt, is a transcontinental country spanning the northeast corner of Africa and southwest corner of Asia via a land bridge formed by the Sinai Peninsula. It is bordered by the Mediter ...
aims to serve the low-income class, as it provides them with housing units consisting of two rooms, a hall or three rooms and a fully finished hall, with an area ranging from 75 to 90 square meters. In addition, these units are offered at a cost price only, with direct support ranging from 5 to 25 thousand pounds. The beneficiary of this unit can pay its price over a period of 20 years, as 538,000 units have been implemented in all governorates and new cities until 2022, implemented by Ministry of Housing, Utilities & Urban Communities.


India

In India, most 'flats' are owned outright. i.e. the title to each individual flat is separate. There is usually a governing body/society/association to administer maintenance and other building needs. These are comparable to the Condominium Buildings in the USA. The laws governing the building, its governing body and how flats within the building are transferred differ from state to state. Certain buildings are organized as "Cooperative Housing Societies" where one actually owns a share in the Cooperative rather than the flat itself. This structure was very popular in the past but has become less common in recent times. Most states have separate laws governing Cooperative Housing Societies. for additional information.


Netherlands

In the Netherlands there are three very different types of organization that could be considered a housing cooperative:


Housing corporation

A ''housing corporation'' (''woningcorporatie'') is a
nonprofit organization A nonprofit organization (NPO) or non-profit organisation, also known as a non-business entity, not-for-profit organization, or nonprofit institution, is a legal entity organized and operated for a collective, public or social benefit, in co ...
dedicated to building and maintaining housing for rent for people with lower income. The first housing corporations started in the second half of the 19th century as small cooperative associations. The first such association in the world, ''VAK'' ("association for the working class") was founded in 1852 in
Amsterdam Amsterdam ( , , , lit. ''The Dam on the River Amstel'') is the Capital of the Netherlands, capital and Municipalities of the Netherlands, most populous city of the Netherlands, with The Hague being the seat of government. It has a population ...
. Between 2.4 and 2.5 million apartments in the Netherlands are rented by the housing corporations, i.e. more than 30% of the total of household dwellings (apartments and houses).


Owner association

A ''(house) owners' association'' (''Vereniging van Eigenaren'', VvE) is by Dutch law established wherever there are separately owned
apartment An apartment (American English), or flat (British English, Indian English, South African English), is a self-contained housing unit (a type of residential real estate) that occupies part of a building, generally on a single story. There are ma ...
s in one building. The members are legally owners of their own apartment but have to cooperate in the association for the maintenance of the building as a whole.


Living cooperation

A ''living cooperation'' (''wooncoöperatie'') is a construct in which residents jointly own an apartment building using a democratically controlled cooperative, and pay rent to their own organisation. They were prohibited after World War II and legalised in 2015.


New Zealand

"Company-share" apartments operate in the New Zealand housing system.


Philippines

In the
Philippines The Philippines (; fil, Pilipinas, links=no), officially the Republic of the Philippines ( fil, Republika ng Pilipinas, links=no), * bik, Republika kan Filipinas * ceb, Republika sa Pilipinas * cbk, República de Filipinas * hil, Republ ...
, a ''tenant-owner's association'' often forms as a means to buy new flats. When the cooperative is set up, it takes the major part of the loan needed to buy a property. These loans will then be paid off during a fixed period of years (typically 20 to 30), and once this is done, the cooperative is dispersed and the flats are transformed into condominiums.


Scandinavia

A ''tenant-owner's association'' (
Swedish Swedish or ' may refer to: Anything from or related to Sweden, a country in Northern Europe. Or, specifically: * Swedish language, a North Germanic language spoken primarily in Sweden and Finland ** Swedish alphabet, the official alphabet used by ...
: ''bostadsrättsförening'',
Norwegian Norwegian, Norwayan, or Norsk may refer to: *Something of, from, or related to Norway, a country in northwestern Europe * Norwegians, both a nation and an ethnic group native to Norway * Demographics of Norway *The Norwegian language, including ...
: ''
borettslag ''Borettslag'' is the legal entity for housing cooperatives in Norway. The company is owned by those who live in the cooperative, the partholders. Each part gives the right to live in the cooperative, and thus in a particular apartment or house. ...
'',
Danish Danish may refer to: * Something of, from, or related to the country of Denmark People * A national or citizen of Denmark, also called a "Dane," see Demographics of Denmark * Culture of Denmark * Danish people or Danes, people with a Danish a ...
: ''andelsboligforening'') is a
legal term {{Short pages monitor